Current Affairs 2022 : Corruption Perception Index in Detail

By Yash Singhal

Corruption Perception Index is the internationally recognised index released after thorough assessments and opinion surveys. Read here the details about the Corruption Perception Index.

Expert assessments and opinion surveys are used to calculate the Corruption Perceptions Index (CPI), which ranks countries based on "their perceived levels of public sector corruption, as determined by expert assessments and opinion surveys." Corruption, according to the CPI, is defined as "abuse of entrusted power for private gain." Since 1995, the non-governmental organisation Transparency International has published an annual ranking of corruption in the world.

This year's Corruption Perceptions Index (CPI), published in January 2022, ranks 180 countries "on a scale from 100 (very clean) to 0 (highly corrupt)," according to the state of affairs between May 2020 and May 2021.

Denmark, New Zealand, Finland, Singapore, and Sweden are perceived to be the least corrupt countries in the world, consistently ranking high in international financial transparency, whereas Syria, Somalia, and South Sudan are perceived to be the most corrupt countries in the world, scoring 13 and 11 out of 100 in 2021, respectively.

Transparency International boarded Johann Graf Lambsdorff, a professor of the University of Passau to create the Corruption Perceptions Index. The CPI for 2012 is based on 16 different surveys and assessments conducted by 12 different organisations and organisations. A group of analysts conducted a total of 13 surveys and assessments, which were either business people's opinions surveys or performance assessments. The first CPIs were based on public opinion surveys. The following are the institutions: 

• African Development Bank (with its headquarters in Côte d'Ivoire)
• The Bertelsmann Foundation is a non-profit organisation dedicated to advancing the interests of the Bertelsmann family (based in Germany)
• According to the Economist Intelligence Unit (based in the UK)
• Freedom House is a non-profit organisation dedicated to promoting human rights (based in the US)
• Insights from Around the World (based in the US)
• The International Institute for Management Development (IIMD) is a non-profit organisation dedicated to the advancement of management development worldwide (based in Switzerland)
• The Consultancy for Political and Economic Risk (based in Hong Kong)
• The PRS Group, Inc. is a privately held corporation (based in the US)
• International Monetary Fund (IMF)
• The World Bank is a multilateral financial institution that was established in 1945.
• The World Justice Project is a non-profit organisation dedicated to promoting social justice throughout the world (based in the US)

To be included in the CPI, countries must be evaluated by at least three different sources. To avoid the difficulties associated with measuring absolute levels of corruption, the CPI measures perceptions of corruption. 

Validity

According to a study published in 2002, there is a "very strong significant correlation" between the Corruption Perceptions Index and two other proxies for corruption: black market activity and an overabundance of regulatory authority (or overregulation). (Copied)

All three metrics also showed a highly significant relationship with the real gross domestic product per capita (RGDP/Cap); the correlation between the Corruption Perceptions Index and RGDP/Cap was the strongest, accounting for more than three-quarters of the variance in the two variables. For reference, the lower the number on this scale represents greater corruption, so countries with higher RGDPs had, on average, lower levels of corruption.

According to Alex Cobham of the Center for Global Development, Transparency International, the publisher of the Corruption Perceptions Index, "many of the staff and chapters" at the organisation "protest internally" over concerns about the index in 2013. Johann Graf Lambsdorff, the index's original creator, withdrew from further work on the index in 2009, citing personal reasons "I created the Corruption Perceptions Index in 1995 and have been in charge of it ever since, bringing Transparency International (TI) into the limelight of international attention. In August 2009, I notified Cobus de Swardt, Managing Director of Transparency International, that I would no longer be available to participate in the Corruption Perceptions Index." 

Economic Implications

The economic consequences of corruption perception, as defined by the CPI, were the subject of several research papers published in 2007 and 2008. The researchers discovered a positive relationship between a country's CPI score and long-term economic growth, as well as a 1.7 per cent increase in GDP growth for every unit increase in a country's CPI score. In addition, a power-law relationship was demonstrated between higher CPI scores and higher rates of foreign investment in a country.

Flaws

According to political scientist Dan Hough, the Index has three flaws, which are as follows:

Corruption is a concept that is far too complex to be captured by a single score. For example, the nature of corruption in rural Kansas will be very different from that in the city administration of New York, yet the Index measures them in the same way on both occasions.

By measuring perceptions of corruption rather than actual corruption, the Index may be simply reinforcing already-existing stereotypes and cliches about corruption.

The Index only measures corruption in the public sector, with no consideration given to corruption in the private sector. This means that, for example, the widely publicised Libor scandal and the Volkswagen emissions scandal are not considered corrupt actions.

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